Consulting Agency UkrAgroConsult
The U.S. Department of Agriculture in its June 12 Crop Production report forecast 2018 U.S. winter wheat outturn at 1.198 billion bushels, up 6.174 million bushels, or 0.5%, from 1.192 billion bushels in May but down 71.721 million bushels, or 6%, from 1.269 billion bushels in 2017. The increase from May resulted from a slight increase in average yield, estimated at 48.4 bushels per acre, up 0.3 bushels from May but down 2.1 bushels from a year earlier, with harvested area unchanged from May at 24.769 million acres. The USDA production number was above the average trade expectation of 1.187 billion bushels.
Hard red winter wheat production was forecast at 650.373 million bushels, up 1% from May but down 13% from 2017, soft red winter at 315.5 million bushels, up slightly from May and up 8% from last year, and white winter at 231.843 million bushels, up 2% from both May and from a year ago. The 2018 white winter wheat consisted of 21.829 million bushels of hard white and 210.014 million bushels of soft white.
Production estimates for Kansas, Oklahoma and Texas all were unchanged from May. The USDA raised production forecasts from May in 10 of the 25 top producing states, lowered forecasts in nine states and left six states unchanged.
In its World Agricultural Supply and Demand Estimates report, the USDA projected U.S. wheat carryover on June 1, 2019, at 946 million bushels, down 9 million bushels from the May forecast and down 134 million bushels, or 12%, from 1.080 billion bushels in 2018, which was raised 10 million bushels from May due to a like decrease in exports, estimated at 900 million bushels. Exports for 2018-19 were forecast at 950 million bushels, up 25 million bushels from the May forecast “on tightening Russian supplies,” and up 50 million bushels from 2017-18.
The USDA forecast 2018-19 Russian wheat production at 68.5 million tonnes, down 3.5 million tonnes, or 5%, from the May forecast, and down 16.49 million tonnes, or 19%, from 2017-18. Exports of wheat by Russia were forecast at 35 million tonnes, down 1.5 million tonnes from May and down 5.5 million tonnes from 2017-18.
U.S. all-wheat production in 2018 was forecast at 1.827 billion bushels, up 6 million bushels from the May forecast, reflecting a like increase in winter wheat production, and up 86 million bushels, or 5%, from 1.741 billion bushels in 2017.
The average price for wheat paid to U.S. farmers was estimated at $4.75 per bushel in 2017-18, up 5¢ from May, and for 2018-19 was forecast to range between $4.60 and $5.60 per bushel, up 10¢ from the May forecast.
The USDA projected the carryover of corn on Sept. 1, 2019, at 1.577 billion bushels, down 105 million bushels, or 6%, from the May forecast and down 525 million bushels, or 25%, from 2.102 billion bushels forecast for 2018, which was lowered 80 million bushels from May based on 5 million bushels lower imports at 45 million bushels, and 75 million bushels higher exports at 2.3 billion bushels. For 2018-19, forecast production was unchanged from May at 14.040 billion bushels, with total supply down 80 million bushels at 16.192 billion bushels based on lower beginning stocks. Total use was raised 25 million bushels from May to 14.615 billion bushels, based on a 25-million-bushel reduction in feed and residual use, forecast at 5.350 billion bushels, a 50-million-bushel increase in use for ethanol, forecast at 5.675 billion bushels, with exports unchanged at 2.100 billion bushels. The average price of corn paid to farmers in 2018-19 was forecast to range between $3.40 and $4.40 per bushel, up 10¢ from May and compared with $3.25 to $3.55 per bushel forecast for 2017-18.
The USDA projected U.S. soybean carryover on Sept. 1, 2019, at 385 million bushels, down 30 million bushels, or 7%, from the May forecast and down 120 million bushels, or 24%, from 505 million bushels forecast for 2018, which was lowered 25 million bushels from May based on a like increase in 2017-18 soybean crush, forecast at a record 2.015 billion bushels. For 2018-19, crush was raised 5 million bushels from May to 2 billion bushels, but was down 15 million bushels from 2017-18. Forecast exports were unchanged for both years at 2.065 billion bushels for 2017-18 and 2.290 billion bushels for 2018-19. The average price of soybeans paid to farmers in 2018-19 was forecast at $8.75 to $11.25 per bushel, unchanged from May, compared with $9.40 per bushel in 2017-18, up 5¢ from May.
The USDA projected 2019 carryover numbers were above average pre-report trade expectations of 957 million bushels for wheat, 1.642 billion bushels for corn and 435 million bushels for soybeans.
Wheat, corn, soybean and soybean meal futures traded higher while soybean oil traded lower after the USDA reports.
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